Interdependence of Intra- and Inter-African Trade: Learning by Exporting to Developed Countries

Preferential trade agreements and globalization have transformed international trade, providing African nations with fresh opportunities to capitalize on exports activities for economic growth. In this study, we explored the learning by exporting (LBE) effect from trade that occur not just via trade to developed world but also due to the intra-African trade. We focus on the extensive margins gains to African countries that is associated with exporting activities from trade with developed and intra-African trade relations. Our empirical approach was motivated by the HMR model which considers zero trade flows. Using macro data from 2014 to 2017, our findings underscore the significance of LBE in enhancing trade competitiveness and economic growth in Africa. We find that trade with Africa or developing countries raises the possibility that a country will be exporting in the next year, displaying a learning effect. This effect is stronger when trading with both the developed and African together. We also found that trading within the same industry can increase a country's productivity and lead to the export of related goods which is termed as the spillover effect. Keywords: Learning-b- Exporting, extensive margin,